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Microsoft postpones LAR rebate changes

Microscope contributor

Microsoft has delayed the European roll out of its global rebate programme for LARs until January after partners complained they needed more time to adjust their business model to reflect the revamped structure.

The worldwide rebate scheme came into effect on 1 July but Microsoft Europe held back implementing the changes - a shift in rebates to sales of more complex applications - until October, a date that has now slipped further.

"The date [of implementation in Europe] has been postponed due to partner feedback on the readiness of the channel to adapt to the changes," said one LAR that asked to remain unnamed.

From the start of 2009 LARs will see their rebates on standard desktop applications plummet to 0.5% and the reward for compliance and SAM competencies will be removed following their introduction in 2007.

Total rebates available will remain unchanged but to earn the full amount LARs must sell more complex applications including ForeFront, Office Communications Server, SharePoint and security stacks.

This means LARs will need to develop more technical skills around these areas, the main reason why many felt a roll out was not feasible in 2008.

Another LAR suggested there should be period of rebate transition, "like a sliding scale rather than a knife edge change from one programme to another that is considerably different", he said.

"The merits of the new programme are obvious, Microsoft wants to change LARs behaviour, but the channel needs time to get staff trained to meet the objectives or it might not make the rebates," the LAR added.

Some are sceptical about the potential to earn as much rebate as the technologies are more difficult to sell and licenses are generally bought in lower volumes. "Microsoft wants to cut our rebates", said a third LAR.

Simon Aldous, partner group manager at Microsoft said "we are constantly reviewing our rebate scheme to make sure we can drive our objectives and reward our partners for their investment in our business."

Only last week, the software giant carved up distributor rebates to drive its volume partners to promote more complex technologies including SharePoint, management tools and security.


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